I like the various blogs associated with my many hobbies and even those to do with work. I find them very useful and I was excited when the Business Intelligence Network invited me to write my very own blog. At last I now have somewhere to park all the various tidbits that I know are useful, but I am not sure what to do with. I am interested in a wide range of information technologies and so you might find my thoughts will bounce around a bit. I hope these thoughts will provoke some interesting discussions.

Colin White is the founder of BI Research and president of DataBase Associates Inc. As an analyst, educator and writer, he is well known for his in-depth knowledge of data management, information integration, and business intelligence technologies and how they can be used for building the smart and agile business. With many years of IT experience, he has consulted for dozens of companies throughout the world and is a frequent speaker at leading IT events. Colin has written numerous articles and papers on deploying new and evolving information technologies for business benefit and is a regular contributor to several leading print- and web-based industry journals. For ten years he was the conference chair of the Shared Insights Portals, Content Management, and Collaboration conference. He was also the conference director of the DB/EXPO trade show and conference.

August 2008 Archives

The last few weeks have seen some major changes in Microsoft BI. There was the Datallegro acquisition, the announcement that Bill Baker was leaving, and the release of SQL Server 2008. For me, the first two changes are likely to have the most impact. SQL Server 2008 is well covered on the Microsoft Web site and so I won't address this topic here.

The acquisition of Datallegro created a significant amount of interest, and over the last two weeks I have discussed the acquisition with a wide range of people. Although opinions vary, some general consensus has emerged from those discussions.

The first question is why did Microsoft acquire Datallegro? The answer is that Microsoft wants to market SQL Server as a solution for large-scale data warehousing, and to do this they need to compete with the main DBMS vendors who have massively parallel database products. The Microsoft research group in San Francisco was spearheading key efforts to expand SQL Server in this area, but with the tragic death of Jim Gray it would appear the group lost momentum. To regain this momentum, Microsoft felt it needed to purchase an MPP database appliance.

Why Datallegro? There are a wide range of database appliances on the market, but some of them use proprietary hardware and software techniques, and many of them are tightly integrated into the underlying system. What Microsoft needed was a conventional relational DBMS appliance where they could quickly replace Linux by Windows, and the open source relational DBMS by SQL Server. A smaller number of appliances fit this requirement. Datallegro was one of them, and as we saw the ultimate winner.

What has Microsoft bought? This is a more controversial question. The first thing to note is the purchase price. The rumor mill reports the number to be $275 million. From my perspective this is a staggering sum for a company with a limited track record in data warehousing and few customers. Many people I spoke to were appalled by the sum paid by Microsoft. The feeling is that Microsoft purchased a marketing position rather than any real technology. One shouldn't of course underestimate the power of this marketing position. Whereas I don't think IBM or Teradata will feel threatened by the acquisition, it does put Oracle in a difficult position.

Oracle has spent years trying to sell its shared everything solution as a competitor to shared nothing MPP approaches for data warehousing. The result is that it is losing market share to competitors such as IBM, Teradata and appliance vendors in the high-end data warehousing sector. From a marketing perspective, Microsoft is now adding to this competitive pressure. Oracle now has the choice of eating humble pie and acquiring or building an MPP solution, or seeing the continuing erosion of its large-scale data warehousing market share as customers see the benefits of alternative solutions. My money is on Oracle burying its head in the sand and doing nothing.

The remaining question is whether Microsoft will succeed in using the Datallegro acquisition to penetrate high-end data warehousing. Given that SQL Server 2008 has just shipped, it means that the next release of SQL Server will not be for about another three years. A lot can happen in that time. Stuart Frost, the CEO of Datallegro, disputes this three year figure in blogs he has written, but Microsoft has a more rigid development, test, and release cycle than startups like Datallegro do. Even if the SQL Server MPP capability can be put into an interim release, it is unlikely we will see anything for two years.

Another issue concerns how Microsoft is managing its data warehousing development. It would appear that the BI team in Redmond has ceded Microsoft's data warehousing strategy to the SQL Server Group. In turn, the SQL Group has set up a data warehousing center of excellence at the Datallegro HQ in Southern California. Datallegro has limited data warehousing expertise, and for Redmond to have this remote group driving its data warehousing strategy appears very risky.

This brings me to the departure of Bill Baker to become CTO of Visible Technologies. This is a major loss for Microsoft. Bill is a visionary, an incredible leader, and was the driving force behind putting Microsoft on the BI and data warehousing roadmap. Microsoft has now lost two key BI and data warehousing people, Jim Gray and Bill Baker. They are irreplaceable, and setting up a data warehousing center of excellence in Southern California doesn't come close to making up for this loss.

Scott Humphrey's Pacific Northwest BI Summit is my favorite event of the year. This is not only because it is at the Weasku Inn on the beautiful Rogue River in Oregon (which is only a 40 minute drive from Ashland where I live), but also because the vendors, consultants, and analysts who attend the event come together and share ideas in a unique way that is unlike any other event I attend during the year. Marketing hype and vendor competition are forgotten and everyone has down to earth formal and informal discussions on the state of the industry and its likely direction.

This year was the seventh year the event has been held and it surpassed even the excellence of previous summits. The four analysts and consultants (Jill Dyche, Claudia Imhoff, William McKnight, and myself) were joined by representatives from Composite Software, Dataflux, Eyeris, HP, IBM Cognos, Infocentricity, Microsoft, Paraccel, PivotLink, SAP Business Objects, Teradata, Xactly Corporation, and of course the BI Network.

The informal discussions covered a wide range of topics from BI to politics! The acquisition of Datallegro by Microsoft had just happened and this was a big topic of discussion. Although views varied, several people expressed the opinion that Microsoft was really buying an enterprise marketing position (especially against Oracle), rather than any real technology. By this time the industry blogging machine was working overtime and several blogs had already reported the purchase price to be $275 million, which staggered everyone.

Towards the end of the summit, news was leaking out that Bill Baker was leaving Microsoft and everyone agreed this was a tragic loss for the company. Microsoft is certainly going through some dramatic changes in the BI area.

The formal discussions focused on Software as a Service BI (led by Claudia Imhoff), CRM (led by Jill Dyche), Operational BI (led by myself) and IT Leadership (led by William McKnight). The volume of information and discussion is too lengthy to report here, but the BI Network will be releasing a number of podcasts on some of the discussions in the near future. Podcasts with each of the vendors are already available.

Some key points I got from these four sessions were:

1. There is considerable interest in SaaS BI by both vendors and customers. BI is being used not only by SMBs, but also groups within large organizations. SaaS BI is often used to get a project started and many companies would like to bring the project in house once it matures. Many people felt that the pay as your go model will gradually become the norm for both SaaS and on-premises solutions (as pointed out at the summit "on-premises" is correct English usage, but "on-premise" is not). Lastly, like in-house application packages in the past, SaaS companies and solutions will merge and be acquired to provide a set of application solutions, rather than remain as stand-alone silos.

2. CRM is going through a reemergence with companies focusing on micromarketing, social computing as a new CRM information source, and increased interest in master data management.

3. There was universal agreement that operational BI is a big growth area, but that the range of solutions and vendors both inside and outside BI is large and confusing. One point of discussion was the convergence of operational BI with business process management and complex event processing. Other discussions focused on the impact of operational BI being process driven, rather than data driven, and on whether BI is the best term to use to describe analytical and decision making solutions moving forward.

4. The discussion on IT leadership generated many different viewpoints. There was universal agreement that companies need to focus less on reducing IT costs, and more on recognizing IT as a essential business component of the organization, in the same way, for example, that HR is. There was also a lot of discussion about the need for IT to modernize its thinking, and create a more flexible governance environment to handle emerging technologies such as social computing.

The summit offered several opportunities to enjoy the many tourist activities of the Rogue River. The highlight for me was a visit to the Wildlife Images animal rehabilitation and education center. Everyone fell in love with a badger called Nubs with the result that the group donated $1,000 to support Nubs and other animals at the center.